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The Venezuelan oil ministry has rejected a proposal from British oil company BP to acquire French firm Total’s interest in a natural gas project located along the maritime border with Trinidad and Tobago.

Citing unnamed sources, Reuters reported that the ministry turned down the deal last month saying the area’s reserves needed to be re-estimated.

The same argument was used by Venezuela’s socialist government to reject other deals.

The deal had been awaiting approval for two years.

Total owns a 49% stake in Block 4 in the currently inactive Deltana Platform off Venezuela’s eastern coast, while the remaining 51% interest is owned by Norwegian firm Equinor.

According to an Equinor spokesperson, the company finished exploration drilling on the project ten years ago.

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By GlobalData
“Venezuela is home to the world’s largest crude reserves, but output has been declining amid a political and economic crisis.”

The licence was awarded in 2003 and state-run oil company PDVSA has an option to acquire up to 35% following a commercial discovery.

Undisclosed sources told the publication that BP, which owns the rights to the Trinidadian side of the project, could have used gas production from the platform to support its growing operations on the island.

Venezuela is home to the world’s largest crude reserves, but output has been declining amid a political and economic crisis.

According to BP’s Statistical Review of World Energy, the country’s gas reserves were 225 trillion cubic feet (tcf) at the end of last year.

In addition to Total, other Western oil companies such as Shell are looking to minimise their Venezuelan operations due to US sanctions and corruption investigations involving government officials and PDVSA.

Earlier this year, Shell sought approval for the sale of its crude asset in Venezuela to France’s Maurel & Prom.

Company sources said Total recently downgraded its Venezuelan projects to the lowest investment category, implying it could continue looking for buyers.

The news agency stated that the government led by former President Hugo Chavez tried to expropriate prominent gas projects in the country, including the Deltana and Mariscal Sucre offshore projects, which have total estimated reserves of 22tcf.

These projects could not be brought on stream due to delays arising from funding restrictions and ownership disputes between PDVSA and private companies.